By Rosemary
U.S. stocks closed modestly higher on Thursday, stabilizing after a volatile start to the session as investors weighed persistent geopolitical risks against renewed diplomatic signals in the Middle East. The gains came despite a rebound in oil prices, underscoring the market’s resilience following a powerful rally a day earlier driven by optimism over a temporary ceasefire involving Iran.
Trading opened on a cautious note, with Wall Street initially tracking losses seen across Asian and European markets. Early declines reflected lingering uncertainty about the durability of the ceasefire and its broader implications for global energy flows. However, sentiment improved steadily throughout the day after Israel’s prime minister authorized direct negotiations with Lebanon, a move that helped ease fears of an immediate escalation and suggested that diplomatic channels may still hold.
By the closing bell, the S&P 500 had erased its early losses and advanced 0.6%, continuing to hover near record territory. The Dow Jones Industrial Average rose by 275 points, also a 0.6% increase, while the Nasdaq Composite outperformed with a gain of 0.8%. The recovery highlighted investors’ willingness to re-enter equities even as uncertainties around energy markets and regional stability persist.
Oil prices, while retreating from their session highs, remained elevated as traders assessed ongoing risks to supply. Concerns continue to center on disruptions in the Strait of Hormuz, a critical artery for global energy shipments. Uncertainty over when tanker traffic will fully normalize has kept supply expectations constrained, sustaining upward pressure on crude prices.
Benchmark U.S. crude settled 3.7% higher at $97.87 per barrel after briefly approaching $103 earlier in the day. Brent crude, the international benchmark, rose 1.2% to close at $95.92 per barrel. The fluctuations reflect a market still highly sensitive to geopolitical developments, with prices swinging sharply in recent weeks as hopes for stability rise and fall.
Analysts caution that the divergence between U.S. and Iranian positions could prolong volatility in energy markets. Strategists note that even in the absence of direct conflict, precautionary stockpiling by global buyers could tighten available supply, reinforcing price strength. This dynamic has been evident since late February, when crude prices surged from around $70 per barrel to peaks above $119 amid escalating tensions.
Despite these pressures, the broader U.S. equity market remains remarkably resilient. The S&P 500 is currently just over 2% below its all-time high set earlier this year, supported by strong corporate earnings and continued investor confidence in long-term growth prospects.
Corporate developments also played a significant role in Thursday’s trading. Constellation Brands emerged as one of the session’s top performers, climbing 8.5% after reporting quarterly results that exceeded analyst expectations. The company cited strong demand trends across its beverage portfolio, including its flagship beer and wine brands, although it withdrew its longer-term financial guidance due to limited visibility in the near-term economic environment.
In the technology sector, CoreWeave advanced 3.5% after announcing a major expansion of its partnership with Meta Platforms. The deal, valued at $21 billion, will see CoreWeave provide artificial intelligence cloud infrastructure through the end of 2032. Shares of Meta Platforms rose 2.6% in response, reflecting investor enthusiasm for continued investment in AI capabilities.
Not all companies shared in the market’s gains. Simply Good Foods fell sharply, dropping 18.1% after reporting a steeper-than-expected decline in revenue. Company leadership acknowledged the disappointing performance and indicated that corrective measures are being implemented to address operational challenges and restore growth.
Economic data released during the session added another layer of complexity to the market outlook. A key measure of underlying inflation came in slightly higher than economists had forecast, suggesting that price pressures remain persistent even before accounting for recent increases in energy costs. At the same time, weekly jobless claims rose more than expected, potentially signaling early signs of softening in the labor market.
Bond markets reflected this mixed picture, with Treasury yields fluctuating throughout the day before settling near previous levels. The yield on the 10-year Treasury note edged down to 4.28%, remaining well above levels seen prior to the onset of geopolitical tensions. Elevated yields continue to translate into higher borrowing costs for households and businesses, particularly in areas such as mortgages and corporate financing.
Looking ahead, the trajectory of oil prices will likely play a critical role in shaping monetary policy. Sustained increases in energy costs could complicate the Federal Reserve’s efforts to bring inflation under control, potentially delaying or even reversing anticipated interest rate cuts. Minutes from the Fed’s latest meeting indicate that some policymakers are already considering the possibility of additional rate hikes if inflationary pressures persist.
Global markets mirrored the cautious tone seen earlier in the day. South Korea’s Kospi index declined 1.6%, while Germany’s DAX fell 1.1%, reflecting broader concerns about economic momentum and geopolitical risk.
As investors continue to navigate an environment defined by shifting geopolitical dynamics, uncertain energy supplies, and mixed economic signals, market movements are likely to remain sensitive to both policy developments and events on the ground.